For centuries, home ownership has proved to be reliable path to riches. However nowadays, due to elevated prices and an acute lack of supply, this is a dream for many, especially those trying to initially get on the property ladder.
Not surprisingly therefore, more and more people are turning to the buoyant Build-to-Rent sector, which real-estate adviser Savills expects to ultimately be worth £543.6bn, equivalent to 1.749m apartments compared to 30.4k today (£9.6bn).
Whats more this isn't simply down to affordability either. People and even cash-strapped students prefer large-scale purpose-built accommodation - providing security, convenience, communal spaces and quality of life vs dingy old digs.
Watkins Jones benefits from both of this secular trends. Today announcing 6 deals, to build 1,074 new PBSA beds and 370 BtR units over the next 3 years. Thus providing investors with not only multi-year visibility and downside resilience - but also at an attractive entry point, with the shares trading on a modest 13x PER, whilst paying a 3.9% dividend yield. We make no change to our forecasts or 250p/share valuation.
CEO Richard Simpson concluding: ''We continue to see positive momentum across all key areas of the business. Our 6 PBSA schemes for delivery in FY19 are on track for completion ahead of the 2019/20 academic year and we continue to see an encouraging pipeline of potential future sites across the UK. The sectors in which we operate are highly attractive to investors and we continue to make solid progress against our internal targets."
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